“It isn’t just about offering contracts to large organisations, but we’re not going to be running as many services as we’ve done in the past.”

He added reductions in the workforce could come through retirements and people leaving, as opposed to redundancies.

Some of the services it has privatised include parts of the highways department, in partnership with Ringway Jacobs, and it outsourced property and facilities management to Mitie, which saved about £2million a year.

Mr Finch added the council will scrutinise companies which have won contracts to make sure their work is good enough, and could include penalities and incentives in their contracts. Office functions and costs will also be scaled back as part of the programme.

The start of the development of the plan was approved by council members on Friday and now experts will work out a savings programme up to June.

By March 2014, the new structure is expected to be in place, while two years later it expects services to have been tendered.

As part of the savings in the past three years, council leader Peter Martin said £170million had come through procurement, and another £100million through efficiency savings.

He added: “We are in for austere times for the next five or six years.”